Your credit card bill, mortgage, or auto loan statement may have a Due Date prominently displayed, but when do those lenders actually report your balance – or if your payment is late – to the credit bureaus?
Knowing when each of your credit accounts reports can serve as a valuable aid in managing your credit score and finances. For instance, if you purposely pay down a credit card balance by this date – not just the due date – your credit utilization (the ratio of balance to total available credit) will look favorable, and therefore your score will increase. Conversely, not paying down balances by this Report Date could actually lower your credit score accordingly, even if you haven’t missed a payment.
The short answer is that different banks, lenders, and financial institutions all have their own policies and practices for when they report to the bureaus, so it’s nearly impossible to decipher with any accuracy.
While that may not be a big practical help, the reality is that for the huge banks and financial institutions – like Chase, Bank of America, etc. – there is no one universal report date for all of their tens of millions of consumers.
But it’s still possible to find out your individual report date and take advantage of that information to protect – or increase – your credit score.
Here is the process by which most big banks, lenders, and financial institutions report consumer information to the credit bureaus:
1. The Statement Date falls on the day, or next couple days after when your monthly billing cycle is complete. At that time, the creditor or its third-party processing company automatically sends certain data to each of the three credit bureaus, Equifax, Experian and TransUnion. This data includes your credit card balance (assuming it’s a credit card), credit limit, the payment that is due, a seven-year payment history and other assorted account information.
2. But some banks don’t always transmit this data on the Statement Date, but utilize a cutoff date that is totally different to contact the credit bureaus with your information.
3. To further complicate the process, each lender may use different cutoff dates to send data to each of the three credit bureaus.
4. Once the credit bureau (Equifax, Experian or TransUnion) receives the account data from the creditor, they add it to their massive electronic database of information – sometimes holding records of up to 200 million consumers!
5. Remember that the credit bureaus funnel information through their systems a little differently based on the purpose of the lender.
6. So the algorithms, prioritization of data, and the resulting report may be different for a bank that wants consumer information when opening accounts, mortgage lenders issuing home loans, and consumers looking up their own scores, etc.
7. Of course this data may be transmitted to the credit bureau(s) on the same day, but the time it takes to update their records based on these different functions may be staggered, so they are not always in sync.
8. Therefore, it is nearly impossible to determine one exact Reporting Date for each of your credit accounts, as the date the data is transmitted, the credit bureau in question, and even the intended end-use of the data all come into play and may vary the timelines.
So as a consumer, how can you figure out the reporting date, statement date, and/or cutoff date of each of your creditors, and whether they report uniformly to the three credit bureaus together, or separately?
Even calling your credit card companies and creditors probably won’t give you a rock-solid answer, as the company employees can’t predict which batch of information your data will be sent with, and the subsequent processing times.
So as a general rule, credit scoring experts advise you don’t try to “outwit” or predict the reporting system – because you’ll probably be wrong.
A safer course of action would be to look at managing your credit correctly and consistently over the long term, always paying on time, paying balances as low as possible as soon as possible (no need to wait until the statement due date), keeping well-seasoned and a good mix of installment and revolving debt, and trying not to open new accounts or make drastic changes unless necessary.
Together, along with monitoring your credit report at least once a year from each of the major bureaus, you’ll be on track to keeping a great credit score.
